tv Bloomberg Markets Bloomberg August 31, 2015 3:00pm-4:01pm EDT
opec. we will drill down on where prices are headed next. scarlet: a new poll shows hillary clinton's lead-ish ranking at the current democratic competitor. scarlet: good afternoon. i am scarlet fu here with alex deal. i cannot miss i last week. alix: so good to have you back. one of the longest weeks i have known it quite some time. i even had a baby. scarlet: if you look at how stocks are doing today, it is like ignoring what happened last week in the previous prided. we are only down 147 points. -- like ignoring what happened in the previous week. volume is decreasing.
something so fascinating is how immense the volume got. it was almost double the amount of a 10 day average. now volume off anywhere between 20% and 30% for all of the major indices. a much lighter environment. alix: there is a lot of nervousness and tiptoeing. we got a big data week,: meeting with the big jobs number friday. we had a little bit of a recovery in stocks and then slid back down is about oil prices, the tremendous move on the speculation that opec would talk about a price floor. i want to point out how short the market actually is. total short 778,000 contract. down about two percent. it means the bowler getting out of the short position, which aggravates any rise to the upside when you have a perceived bullish headline. i very crowded trade
right now for sure to bet against oil. you were looking at the terminal. alix: come on inside into my room bear -- bloomberg terminal is my phrase. the white line is the credit spreads. are demanding over treasuries. that has climbed by 32 basis points over the past three months. the last three times that happened the s&p fell by an average 18% more. that is good context. a lot of people saying you should look at the credit market as a leading indicator. you can do that, but when does the movement, as a response? come inside my terminal. this is the vix and european vix. not, volatility not that extreme when you compare it to europe. the blue line is the united
--tes and oranges the united is europe. ever so briefly the blue line, u.s., went to 36. it topped what we saw in europe, which is 33. once again volatility in the u.s. taking a backseat to volatility in europe. for a moment briefly it was worse. and has not the verge that much. definitely a correlation to watch. top stories making headlines at this hour. president obama heading to alaska with the start of a three-day trip. he is the first sitting president to visit the arctic. mr. obama is backing and interior department -- department decision to rename mount mckinley. will be known by the traditional native name, denali. president obama will take a walk on the wild side. he will trek through the wilderness with derek willis --
gryllis. he is the first president to receive a crash course in survival techniques. i'm thinking civil -- secret service will be pretty close. jeff merkley is the latest to say he will vote to support the agreement. three morent needs votes to sustain a likely veto of legislation aimed at killing the deal. alix: the obama administration drafting legislation aimed at punishing china and other network for hacking computer networks. the measures have not been decided on yet and concerned sanctions could trigger further online attacks. police: violence between and protesters outside ukraine parliament. a grenade was thrown killing one officer and wounded 90 others. they voted in favor to give more
power to separatist regions in eastern ukraine. have u.s. prosecutors expanded currency manipulation by some of the world's largest banks to include the russian ruble and riddell. the justice department is using feels it reached with hanks in may to get more information on market rigging. it has attracted the attention of u.s. prosecutors people familiar with the letter said. the latest phase focusing on trading practices at banks. walmart spending a billion dollars to raise employee wages and get more training. the replay -- retailer cutting worker hours in order to keep costs in line. they have been told to leave shifts early or take longer lunches. those are your top stories. up, the latest result of the bloomberg politics . the latest poll shows shift in voter interest. is team hillary panicking?
emerging market etf using $2.5 billion in just a week and debriefing the gains. mark andreessen, cofounder of andreessen horowitz. that and much more coming up. alix: investor tom demarcus made several calls in recent years. he recently predicted this 11 chinese thoughts and now has held -- told bloomberg to expect continued erosion because we are not at the bottom. >> there are preconditions into the lower 3200 that the market does not read through -- meet the requirement. we should see the low of last week undercut. 25 .90.d see what would continue to version mean for the u.s. global market cap of joining us this
chief market strategist at u.s. trust. we had a week to digest the craziness. weekend certainly. give us your read on what happened and whether it is set to continue. get used to the volatility. the a time -- the economy is slowing down. china is in a long transition. away from exports and investment toward consumption and services. it is not going to happen overnight so markets have woken up to the fact that china is not linear. the key is how much global pain that will inflict on the emerging markets, europe and the united states. not so much given the united states, the expert ties are a little bit lower. interesting to watch his world stocks versus how the economy is doing. bloomberg world index versus the economic surprise index. it is down 7% in the past month.
down by 5%. the purple line is the economic surprise index. what happened? >> we see a global economy that is.net. there is more growth coming out of europe, the united date. when china grows by 4% or 5%, that it is still a lot of output. we do not fear global recession. we think the developing economies offset the weakness in the developing economies. more poorly, i am worried about russia, brazil and south africa. they need to do more to generate growth or you will have a stiff headwinds. scarlet: the place to see the show up as an oil prices. all over the place. wti following today's settlement is now up 20% since august 24. it is a mini bull markets for oil. we are stuck in a long-term bear
market. as an investor, how does that change what you do or how you view oil? does it matter it is a couple ofrket? >> things happening. i think it is healthy for the market. you see an equilibrium. opec.t of more portly, there is a lot of fear about high stress, high yield. i think that is starting to work its way through. you are seeing warmer -- more m&a. oil markets are hard to figure out, but still fossil fuel, global economy and will work her way through an equilibrium price. maybe the oil world can be relatively insulated. maybe it can separate itself from the rest of the economy as well. what about the increase we have seen it or print bond deal. i was talking about the spread about what investors are asking
or over the treasury headline, 33 aces point in three months. from the lastlar three trading sessions. you have not said that that word yet. there is concerns about what janet yellen will do. onhink they all culminated and unsettled the global economy. anyone who was nervous came more nervous, but i think it is starting to come back in. what are you going to be doing this week as we await for the jobs number friday? looking for clues from all of the different fed speakers. >> we are looking at the companies that have been being down unjustifiably. like technology, financials. , materials and industrials are too early for looking attractive. we are avoiding emerging markets but they look attractive.
we are not at the bottom yet. we have a shopping list and are looking closely for the dividend players. we have a lot of cash. we are overweight energy. are not ready to fail. we are ready to put it in, not out. trade --na going the white knuckling the trade. scarlet: coming up, who is winning into is losing in the des moines register iowa poll? winston versus standard. ♪ ♪
markets. looks like we may have had a comeback that did not last. matt: it did look like we might have a comeback as a oil. it did not last. we are seeing is the dow jones that is down more than 100 point. close orbe the worst worst month we have had for the dow since 2010, and the worst month for the s&p since 2011 if the numbers persist. .7 5%. off 100 points on the dow jones industrial average. i want to quickly pull of oil and talk about it. we will continue to talk about it a lot. a fascinating story. big enough moves to justify more than one of us pointing it out. opec saying they will collude with other producers in order to put a floor on prices. as a result $3.50 per game barrel.
showed up asly chart to show your over the past three days we have seen the biggest gain in 15 years because my math was fairly poor. i forgot 1990 was one decade back -- even further decade back. i have to chart up on my terminal. there you go. mistake i made was by singing if you have a bloomberg terminal at home, try this function. you won't be able to because it is only terminal -- internal only. you can always e-mail me or call me up and ask if you have the commodity you want to check on. 26% gain in the past three days for crude oil. it has gained more than a quarter. the best three-day gain since monday, august 6, 1990. absolutely amazing as you would imagine. a lot of energy producers deigning on the back of this. one refiner gaining a different
reason. phillips 66 the biggest refiner in america. works -- warren buffett and berkshire hathaway have revealed a stake in phillips 60. gaining today, not as much as the other oil producers. i was pulling up other charts of refiners ursus producers. refiners have done much better. because they can get the oil in at a cheaper price and continue to refine it. refining capacity has been up. is that the deal? alix: good margins. you will keep making products. they have been building products. you nailed it, matt miller. 1990 that 15 years ago. forget the past 10 years. matt: was it really 25 years ago? before pearl jam. more politics here. the results of the latest bloomberg politics more and
register iowa poll episode that shows a shift in voter interest. of 37% the first choice of caucus-goers in the state followed by anders and biden by 14%. i will: back in may that poll had very different numbers. clinton was far ahead. sanders at 16. team biden at eight. joining us with perspective is john heilemann. much more than just the state department versus private e-mail issue that has been talking clinton. that is a pretty big move. >> hillary clinton's margins are down, ladies. it is like something i heard earlier about margins being down . it is funny, this whole we asked about the e-mail controversy for instance that did not seem to bother democratic voters. favorability rating still pretty higher what -- pretty high and i want.
in americanment politics where people are looking for outsiders rather than insiders. fresh faces rather than older basis. bernie sanders is rising of politics. we asked why they are in favor of him, it is not because they do not like hillary clinton, but because they like bernie sanders. he is putting together the same kind of coalition barack obama put together eight years ago, young voters, first-time caucus hours and even independent voters much like the obama coalition in 2008. it is a real problem for her. he is leading in new hampshire so she has real trouble. alix: my question was going to be, does iowa really matter cap that when you compare it to obama, it seems like yes. >> it matters a lot. alix: sec funding moving -- does shese gekko
see funding moving somewhere else you go >> i think there would be widespread democratic she would behether the nominee. then there would be a discussion about other people moving in and things like that. scarlet: there is already panic in the republican party for how well donna trump continues to do. he is still ahead of the game. in the lead and i will come although it is smaller than it has been recently. the big story ben carson surging to a close second place. donald trump and i want. if you think about the poll, trump still way ahead. still the front runner by far. moving up. all four of those candidates, none of them, ted cruz the only one an elected official. he is railing against the washington establishment all the time. the other ones not elected
officials at all. the spirit seems to be bipartisan right now in the country. scarlet: thank you so much. managing editor of bloomberg politics. he hosts with all due respect"." he will be joined at by maier -- mike barnicle coming up at 5:00. alix: much more coming up. a with us. the stock market will be the topic. ♪ ♪
somewhere between 0% and 10% like it or not. i think that is what is being completely and totally overlook right now. the center of pain is clearly the energy sector. a littlehat extends bit but sectors like health care are's all producing full percent earnings growth year-over-year. so there is a divergence of in the s&p 500 that is noticeable. what we are seeing is oil prices with the worst of the pain down for earnings. unless you start to see the housing market turnover, the health-care stocks turnover, then we have a much broader and much deeper correction. but for now it is a tale of two words -- worlds. alix: oil prices and oil stocks
moving in tandem. around 2013 oil prices continued to slide while energy prices held up. do you think they record late in the energy stocks need to fall further oil -- or a story of oil probablytching up? >> oil prices catching up. a lot of it depends on the dynamic of change. a lot of it is dependent how rapidly energy sector estimates fall relative to analyst expectations. right now expectations are extremely low. right now expectations for earnings somewhere around $50 per barrel. we do not have to go to much $250.r on oil to the if oil prices fall further, pressing $30, energy stocks will have to correct. is reacting even more so than they do the absolute price because analyst can perceive that.
isn't it the sign of an unhealthy market if we're so rarely dominated by what happens inone or two cents or's? which case maybe it is time to bail. it certainly is a market running on very thin legs. that has been the case all year. not just our starting in june or july but through the entire year . tax and consumer names have let the market higher. and commodities sense of stocks have lacked the market so far this year. what i would worry about is if we start to see a much bigger defensive leadership take hold. if you cease cyclical stocks take over, health care loses leadership, technology loses leadership, much worse if the consumer is levered starts to lose readership, then we have a much bigger problem. the way it stands now, you can use some breast -- lose some
breath and see it hang in there. he is seen it. my sense is that a lot of it is past. do i think it is the absolute bottom? i don't know. you will see some volatility in my opinion until we see oil prices stabilize, until we see china stabilize. big until oil prices stabilizing and china stabilizing. gina martin adams. up, u.s. stocks closing of brutal, awful month. looking into how far emerging market etf have been hit. ♪ ♪
eu's three." the largest members are calling for a session meeting on the crisis in the next two weeks. of 71eek the bodies migrants were found in a truck abandoned and austria. germany at 7000 to enter the country this year, four times more than in 2014. are askingvocates for pardons. they were sentenced saturday to three years prison. the court said they work guilty of reporting false news. they can still appeal. the egyptian law says the president cannot issue a pardon unless the verdict is final. alix: exelon and pepco says they will go ahead with plans to grade the largest utility in the united states. last week they rejected the proposed $6.8 billion takeover. regulators in several other states have approved the deal. the economymission
and measured by gdp. gdp fell more than 26 percent blamed on a widening crackdown on corruption in china. gambling accounts for 4/5 of the economic outlook. annual gdp growth will hit 7.5% in the fourth quarter, the highest of the asia-pacific quarters blu-ray -- bloomberg surveys. governorentral bank discussed this with bloomberg at jackson hole. >> we export a small amount to china, largely commodities. if the chinese economy grows more slowly than into the data, less of an effect or us. we benefit hugely from lower commodity prices will be another
effect of slower chinese growth. the central bankers says india is better place compared to other countries and raising the level of manufacturing. those are some of your top stories. scarlet: coming up, emerging market etf's were hit so badly erased the whole year. all that and much more coming up on bloomberg "market day." alix: the last trading day of august and stocks headed for the worst 2012.since the aftershocks can still be felt particularly in emerging market etf's which saw over two point $5 billion in losses the racing games for the year. some of the numbers are pretty staggering. you have more context to give us. the highest amount of output
since 2014. some of the biggest losers were china and hong kong. they lost $588 million of amounts investors put in them. it is not that etf's are not performing well, but this is the amount investors want to put in the fund. they feel it is better place to be put in right now. we're talking about the economy earlier, too. as well as taiwan, brazil, the credit rating might be cut to john. well. alix: can you start with the currency devaluation in august how itd track us through may affect capital outflows in india. >> people are worried about a currency war. currencies are going to go higher because this is a zero-sum game. they're worried about their exports in different countries as well. scarlet: the bigger macro
picture as well where we do not know what the federal reserve will do next. that has been the trigger point for china devaluing the currency. they are moving in a different direction. they have bifurcation of policy. people are worried about the global growth engines going down and something emerging markets relied on. i want to show you something him is looking into last week. specifically india and south korea. the orange line will be south korea and the orange line is india. we saw a lot of outflows. what is crazy to me in the past few days it looks like we saw it pick up. -- we stopped the selling in some respects. if you look at the chart, nowhere near as bad as where it was 2004, 2008 or 2011.
i thought it would be pretty interesting. the long-term story, even though we're his talk about 7% gdp being terrible or china, on an absolute basis, still much more appealing than what you had in a developed world. with low volatility, people let their money where it was. now that it is turning to pick up across the globe, you are thinking about the 401(k) and other invest ends. alix: is there a sense for what ? we haveg this around seen some stemming of the crowd, but what would be the catalyst? something would be the fed pushing off of a rate hike. be the something would fed pushing up a rate hike. scarlet: stanley fischer did not give any indication of that over the weekend when he spoke at jackson hole. you did have barclays
pushing that out. there are those who say it is too scary and financial conditions are two stressful. and that will eventually lead to the payroll market. not totally out of the roma possibility. scarlet: there is also the view that the fed and off themselves in a position to raise rates. always looking for a reason to raise rates at zero level. scarlet be in for joe missed.al for what you talking about the winners and losers of last month. i was looking at the best and worst performing equity markets in the world. we tracked 86 bits. the 92% are emerging markets. i will tell you how many posted gains. talking about a little green +. not that many.
part belonged to oil prices. looking at his stork losses on the major indexes, at least the s&p 500 and dow jones. it would depend on where we close. now, weose where we are will see the worst month for the sow and five years. may of 2010, more than five years and the worst month since september 2011. about four years there. back.ost time to we opened up go much lower than this, down 175. back to a loss of only nine points on the dow. because of the game and oil. not only coming up, but the pace that it did. it has really brought of the major producers. this is one month of crude.
this is the past three days. taking a look at the move in the gain asee days, a 26% opposed to a 3% gain. you have the three-day gain. as i have been saying income the strongest three-day gain in 25 years. since before you and i were born there has not been a move like this and oil. pulling up the producers that have been hit so hard. the refiners doing fairly well. obviously one of the refiners we've been talking about all day long, philip 60 six, the fact that warren buffett has a four point $5 billion stake in it. 66, the fact that warren buffett has a $4.5 billion dollars stake in it. unlikely we will make up a loss in the next 15 minutes. not only the end of trading for today but the whole month.
when you come in tomorrow, it will be a new month, a new day is upon us. alix: it is true. also seeing all you mob lastficantly compared to week. all 10% compared to the 30 day average. thank you, matt miller. theok at the 10 day -- stories making headlines. apple has taken a major quest in appealep in the quest to to business executives. they will be teaming up with cisco. the deal will make using iphones and ipads with products like videophones, videoconferencing systems and the online service much smoother. so far -- so-called deflategate dispute goes on. tom brady and roger goodell back in court but failed to reach -- an agreement. brady fighting a four-game suspension. the judge says he could announce
a decision as soon as tomorrow but no later than friday. nfl season kicking off in a few days, the first exclusive trailer of the movie that will bring the head trauma controversy to mainstream has arrived. it will star will smith at the andfront of cte research will hit theaters september 25. those are your top stories. defense secretary ash carter was in silicon valley talking to tech leaders about the industry and national security. one of the people he sought out was mark andreessen. the famed investor of and recent horowitz. investor of is an dressein horowitz. thever the past 25 years defense department focused much
more on the large federal contractors. there is a much bigger focus on working with companies. >> how can silicon valley help national defense? >> national defense has become synonymous with technology. cyber security is a perfect example of that. conventional warfare is being shaped by new technology. at least my believe, early stage companies can play a fundamental role in national defense. i know secretary carter certainly believes that. emily: what is your view of that? >> it is very hard, there is known natural fit between organizations that small and that big. developing pathways where young companies can engage and get results in the timeframe that make sense for young companies and dod can get the benefits of technologies and companies, but
having a way to get involved early is really critical. that is what this new unit is set up to do. emily: what is the biggest risk to cyber security right now? i would say,t risk two things, we are used to defending against nationstates. they were against 10:00 a.m. -- teenagers. 10 years ago was organized crime. the french profile has changed dramatically. cyber security, like other kind of security, terribly asymmetrical. the defender has to be correct 100% of the time, but the attacker only has to work once. so if you make the attacks more sophisticated, the defense has to get much more sophisticated. i think we as an industry are still in the process of catching up. thatnk we're coming up on specifically, and i would never
contradict mark on anything. i think the reality is every country in the world is the kind of surveillance that the u.s. does. every country that does all that or wishes they could and trying to figure out how to do it. this is an issue in every single country around the world. if you are a u.s. company or another company trying to operate globally, you have to figure at how to operate in a country where -- in a place where everyone is either doing it or wishing they were doing it. cyber security has become such a crowded space. do you think we are in a bubble? do you think some of these valuations are unsustainable? i was beating to a cofounder earlier who said i think a lot of these companies will not be around. we have placed our bet on titanium. we are living in an online world. the fact that we have this new topic of how to protect cars
from cyber hacking, that is a brand-new thing so there will be a new generation of companies that do just that. joins us nowhang from san francisco. a great interview. ?hat else did you talk about surprised andery excited to get his view on twitter. he thinks what is going on is a blip. he thinks that currency actuations have had a big impact here. what was even more interesting when you listen to his use for how this will impact private sector and private tech valuations, the other side of the equation. he thinks situation normal. some companies are going to .urvive, some are going to fail that is normal. some companies are expensive, some are cheap. he is a lot more optimistic than some of the other investors we have been talking to. we recently had bill curling who said private -- prioritize
profit overgrowth. ssein thing this is a time to invest in market even more. emerging as an increasingly lonely boys of positivity when it comes to what is going on on the private tech side of the equation. i will have another interview coming up is that we are in a bubble on the private tech side and said there will be delayed ipo's as a of this. he does not think we're in a double on the public markets but on the private side, time for a correction. --he does not think we are in a bubble on the public markets. you also talked about the twitter ceo search efforts. ?id he have inside for you emily: he does not know what is
going to happen, but i did ask him about what he think should happen. he said of jack dorsey and evan williams can work something out where they are somehow in the leadership position at twitter, he thinks that be the best thing for twitter. he thinks they should be running the show, but certainly does not know how it is like to play out. we are all anxiously awaiting that. we know that twitter board should be meeting this week, so perhaps we will have information then. alix: good stuff. for more from amber lee and the full interview, tune into bloomberg "west." -- for more from emily chang in the full interview, tune in to bloomberg "west." the charts and the technical levels you need to watch headed into september coming up. ♪
doing with matt miller in the newsroom. quite a month for the markets. give us broad perspective. for me as a reporter probably the most fun i have had all year but it you are a long .nvestor, not cool at all for the dow jones industrial average, the worst month we have seen it since may of 2010. over five years for the s&p. the worst month since september 2011. for the nasdaq, the worst since may 2012. you have not seen losses like this for three years. august like seen an this since 17 years ago. the last time we had an august this bad. all i percent, 6% to send -- depending on where we close. 6% depending on where
we close. we are doing better, but were soy the losses strong and sustained over the month that it cannot and possibly even if we did turn to some gains. taking a look at the big losers. for theor the kickoff losses was media stocks really. even before china devalued. we had real problems out of of disney earnings. they said espn was not getting the subscriber growth they wanted. the reason is the kids are cutting the cord. they do not meet cable anymore because they can watch it all on apple tv and media stocks took a big live. the biggest loser was viacom, which came out after disney, and said similar things said cutting the real deal.s 28% of viacom. 28% of first entry and 15% loss at this.
they are still doing ok because they will come out with star wars, and we are probably going to go see that movie a number of times each person in the world a number of times. as far as the winners, i took a look at the s&p, and the top winners were m&a related. forumberger bought cameron $15 billion. it was a hefty premium. cameron one of the biggest winners on the s&p 500. that's also backed out of that. best buy a big winner. wra i amis a little being told to wrapp. thank you so much, matt miller. the s&p 500 set to pose the worst month in three years. our next guest says it will need a couple more days to stabilize. we are talking technical.
joining us is the technical analyst at oppenheimer and company. he joins me from his firm in new york. if you take a look at the chart from the s&p versus the 200 day moving average, talking to us about what tech gold deterioration we have seen. >> we have seen a notable breakdown in trend. --talk to us about what technical to creation we have detriation we have seen. we have broken below the 200 day moving average. but really, that could act as resistance on the way back up. we're not there yet. what has to happen is for us to stabilize. is very similar to what we went through in 2011 where u.s. debt was downgraded. we had a very steep decline
august 2011. a lot of the intensity indicators bottomed first. it was not until a few months later until the indicators became " less bad." they were diverting with price. they made higher lows. i think we need to see that kind of behavior before the market can start the next leg higher. alix: thank you. we appreciate your tech will take on the last day of august after a brutal month. up on what did you miss, talking to tobias plus glitch tobias, a traitor citigroup for his take on the market. ♪
alix: u.s. stocks closing down. the s&p at its worst in four years, the biggest selloff since 2008. the question is, "what'd you miss?". what a miserable month, the worst for global stocks in more than three years. what's behind the disturbance? have global markets become too complex to explain? supplies -- the surprise countries you probably would not have called safe harbors. alix: and more after jackson hole. so much anticipation over the rate hike. we have to begin with stocks, truly an unbelievable month, the worst for the dow since may,